In the event that the brand new servicer safe harbor statutes otherwise particular brand of its passed with the laws, its unsure how helpful it would be to require acting servicers to look for to remove bans into loan modifications for the agreements

Because extra repayments in order to servicers and you can home loan people in Amendment System are not considered by REMIC laws, it might be helpful for the Treasury Agencies to clarify one particularly bonus repayments wouldn’t lead to bad taxation effects under the REMIC statutes.

Much like the possible income tax problems with bonus money discussed a lot more than, the fresh common fee becoming made by brand new Treasury Company not as much as new Amendment System also brings up uncertainty more if or not an effective securitization researching such as fee will have adverse taxation consequences according to the REMIC laws and regulations. As a result, it would be great for brand new Treasury Company to help you clarify you to definitely such as for example mutual money made by the new Treasury Department won’t bring about unfavorable tax effects underneath the REMIC guidelines.

Extra money so you can servicers and you can home loan proprietors raise prospective taxation things for mortgages included in securitizations one chose REMIC updates

• Choice When Variations Don’t work. In the event that an amendment isn’t needed within the Modification Program and you will perhaps not or even pursued, the newest servicer is required to find almost every other foreclosures avoidance choice, together with solution modification apps, deed-inlieu off foreclosures and you will short sale software. Simultaneously, borrowers that happen to be ineligible with the Refinancing Program or the Modification Program get located an installment of $step one,five-hundred getting relocation expenses so you can effectuate small transformation otherwise deeds-in-lieu away from foreclosure. (more…)